Goldring v Blue Cross Life Insurance Company of Canada, 2017 ABQB 618

Court of Queen’s Bench of Alberta Citation: Goldring v Blue Cross Life Insurance Company of Canada, 2017 ABQB 618 Date: 20171017 Docket: 0801 06431 Registry: Calgary Between: Daniel Goldring Plaintiff - and - Blue Cross Life Insurance Company of Canada Defendant _______________________________________________________ Memorandum of Decision of A. R.

Robertson , Q.C., Master in Chambers _______________________________________________________ Introduction [ 1 ] Blue Cross Life Insurance Company of Canada applies to dismiss this claim, for disability benefits and damages for bad faith, pursuant to rule 4.31 for delay and consequential prejudice. [ 2 ] There is no question that there was some delay in the prosecution of this claim, because for about 2 ½ years the plaintiff was not in touch with his lawyer, or at least during that period nothing happened.

The cumulative delay was much longer than that, although there were other factors that have contributed to the passage of time. [ 3 ] The questions are whether the delay involved a sufficient passing of time to bring rule 4.31 into play, whether there was “significant prejudice”, and if the answers to the first two questions are “yes”, then whether the circumstances are such that discretion should be exercised in favour of the plaintiff Mr. Goldring.

[ 4 ] I have concluded that the application to dismiss the claim fails. The case is to proceed to trial. Rule 4.31: The Correct Approach [ 5 ] In the recent Court of Appeal decision in Humphreys v. Trebilcock , 2017 ABCA 116 , starting at paragraph 150 , the Court listed certain questions to be asked in an application under rule 4.31 where sub-rule (2) is in play: In order to apply r. 4.31 an adjudicator must answer six distinct questions.

First, has the nonmoving party failed to advance the action to the point on the litigation spectrum that a litigant acting reasonably would have attained within the time frame under review? Second, is the shortfall or differential of such a magnitude to qualify as inordinate? Third, if the delay is inordinate has the nonmoving party provided an explanation for the delay? If so, does it justify inordinate delay?

Fourth, if the delay is inordinate and inexcusable, has this delay impaired a sufficiently important interest of the moving party so as to justify overriding the nonmoving party’s interest in having its action adjudged by the court? Has the moving party demonstrated significant prejudice? Fifth, if the moving party relies on the presumption of significant prejudice created by r. 4.31(2), has the nonmoving party rebutted the presumption of significant prejudice?

Sixth, if the moving party has met the criteria for granting relief under r. 4.31(1) , is there a compelling reason not to dismiss the nonmoving party’s action? This question must be posed because of the verb “may” in r. 4.31(1) Analysis Delay [ 6 ] The lawsuit is over nine years old. It has not proceeded quickly, although there was no delay in starting the claim. Mr. Goldring was denied the benefit in January 2008, and on May 30 he sued. [ 7 ] At one point, Blue Cross did not respond to letters from correspondence from Mr. Goldring’s counsel for 7 ½ months.

It did not seem too interested in an expeditious resolution of the claim. [ 8 ] Blue Cross argues that most of the delay can be attributed to Mr. Goldring. Mr. Goldring accepts some of the responsibility for the delay, although some of the time that has passed was beyond his control. For example, some of the “delay” resulted from a one- year delay for Mr. Goldring to be examined at a chronic pain clinic. [ 9 ] However, it is clearly arguable that a reasonable litigant would have advanced the claim to trial long before now.

However, for the reasons that follow, I do not decide whether there was “inordinate” delay or not. I do not find that the delay was “inexcusable.” Prejudice [ 10 ] As to prejudice, Mr. Goldring argues that there is evidence to rebut the presumption of significant prejudice. Blue Cross never had Mr. Goldring examined by an independent medical practitioner, and as one would expect in the case of a large institutional insurer it kept and relied upon significant records made by persons responsible for handling the claim at different times.

Any prejudice that has resulted from the delay, he argues, is modest. [ 11 ] Finally, much of the prejudice that Blue Cross asserts relates to the “bad faith” damages aspect of the claim. Blue Cross argues that even if the long-term disability benefits are found to be payable, there should be no successful award for damages for acting in bad faith, because decisions were made, in the moment, by its employees and consultants acting in good faith. Several of them are either not available because contact with them has been lost or they have passed away.

All Blue Cross has now, in many cases, is notes made at the time, and Mr. Goldring has contradicted several of the facts recorded in those notes. Without being able to produce the witness who made the notes to defend them, Blue Cross is compromised in its ability to defend the bad faith claim. [ 12 ] Overall, Mr. Goldring argues that the assertions of prejudice are latter-day inventions. As late as 2016 counsel for Blue Cross was suggesting that the matter be set down for trial if it could not be resolved. The parties went to mediation, which unfortunately was unsuccessful.

It was only in December 2016 that Blue Cross asserted that it had suffered prejudice. [ 13 ] But many of the items of prejudice that Blue Cross puts forward are not as a result of the delay in the prosecution of the action. [ 14 ] For example, one witness that Blue Cross says is “key” left her position with Blue Cross six months before the claim was even begun.

Any prejudice resulting appears to be unconnected to the delay in prosecution. [ 15 ] Another, a senior manager who had reviewed the file, is said to have been off work on leave and unable to testify, but no medical evidence is put forward to explain that assertion, and that witness swore the affidavit of records on behalf of Blue Cross while she was on that leave, so Mr. Goldring has reason to question her supposed inability to give evidence now. She never returned from that leave and later retired. However, she does not appear to be unable to be reached.

Blue Cross’ witness says that she has been told that the witness’ “condition is both physical and psychological, and she’s not in a stable position” although she is not privy to the witness’ medical records. But she has been on leave since 2008 – since around the time that the claim was filed. She apparently swore the Blue Cross affidavit of records while working occasionally during her leave. At that time, “she was not actually contributing much to anything, given her condition”, according to Blue Cross’ deponent in cross-examination. The evidence does not seriously suggest that

the beginning of her absence from Blue Cross’ list of active employees occurred during the period of the delay complained about. [ 16 ] Another witness was a consultant and she is believed to have retired. Blue Cross has had virtually no contact with her in over seven years. Once again, the loss of contact with this witness does not seem to have been a result of the delay in prosecution of this case. [ 17 ] Little or no attempt has been made to contact the witnesses that Blue Cross says are key to the defence of the case. Its deponent ran into one of them recently - shortly after being cross-examined.

They ran into each other at a coffee shop, they spoke briefly, and the former employee said was working at the Workers’ Compensation Board but the deponent was “in shock” at seeing her and did not think to get contact information. She now says she cannot locate her and the WCB has no record of her as an employee. [ 18 ] Some Blue Cross potential witnesses have died. That former employee’s supervisor died March 25, 2016.

She would have been involved in the discussions leading to the denial of coverage. [ 19 ] A doctor who had done a “paper review” of the medical file and provided his views to Blue Cross died in the intervening years. [ 20 ] None of the Blue Cross witnesses who have died had examined the plaintiff or had much if any direct contact with him. Their involvement was reviewing medical information that had been submitted and making decisions based on those reviews and internal discussions. [ 21 ] One element of prejudice asserted by Blue Cross is the delay in receiving some of Mr. Goldring’s medical evidence.

A medical examination report from September 13, 2013 was not turned over until three years later. This is of concern, because medical conditions are time specific. Blue Cross argues that it lost the ability to challenge that report. [ 22 ] However, at no time in the past nine years has Blue Cross asked for an independent medical examination (“IME”) report. It has denied the claim based on its own internal reviews of medical information provided by Mr.

Goldring and his counsel, so the sound of its alarm of losing the opportunity to seek a timely IME several years ago rings only faintly. [ 23 ] One of the witnesses who died is the treating physician – that is, Mr. Goldring’s own key witness. While Blue Cross will have suffered some potential loss of evidence because its counsel cannot cross-examine the doctor, the primary prejudice resulting from his death is that of Mr. Goldring. Even so, the doctor died many years ago - about 2009 or 2010.

That was only within a year or two of the commencement of the action, so the prejudice from the loss of this potential evidence cannot properly be said to have resulted from the delay.

It would have been unlikely that the case would have been tried before he died, because the case is a disability claim that by its nature requires some passage of time to determine the long-term prognosis, the actual extent of disability, and extent of recovery if there is any. [ 24 ] Of significance is that much of the evidence that Blue Cross puts forward in support of their application is in an affidavit that was sworn only on September 1, 2017, and filed after the deadline for filing its brief for this application, although its application was filed in December 2016. [ 25 ] Much of the evidence adduced in that late-breaking affidavit was obtained after the witness was already cross-examined by counsel for the plaintiff.

She had to be cross-examined again, at the last minute, before Blue Cross’ own application. Blue Cross had to obtain a fiat to file its brief in support of its own application late. Practice Note 2 requires the applicant’s materials to be filed by a certain date. After about nine months, Blue Cross was finding “new” evidence about things that had happened years before. [ 26 ] For this reason alone, Mr. Goldring says there is reason to be sceptical of Blue Cross’ assertion that it was prejudiced by the delay.

It seemed unable to identify most of the alleged prejudice until after the last moment. [ 27 ] In the end, it is correct to say that there has been delay. Most of it was caused by Mr. Goldring. Some of it was the delay often seen in cases of this kind, as the plaintiff who asserts disability finds that he cannot work and the insurance benefit is not made available to him.

Here it may be said to be “inordinate” but in all of the circumstances I cannot find it to be “inexcusable”. [ 28 ] Accordingly, the presumption in rule 4.31 does not apply. [ 29 ] Furthermore, the prejudice to Blue Cross is not significant, or at least it can be said that it is not very significant. The records of Blue Cross in the review of this claim can fairly be expected to be recorded in memoranda and correspondence found in Blue Cross’ files. The decisions made were not based on actual interaction with Mr. Goldring except at the outset. Blue Cross relied on “paper reviews” of the medical evidence.

Decisions for denial of benefits and the reasons for them were, or certainly should have been, recorded. In that regard, the dispute is a “documents case.” Compelling Reason [ 30 ] If I am wrong on my analysis of the application of rule 4.31 otherwise, I turn to the question of whether there is a compelling reason not to dismiss this claim. [ 31 ] Mr. Goldring argues that there is a compelling reason not to dismiss.

He argues that even if the delay is found to be inordinate and inexcusable, and that significant prejudice has resulted, the discretion embedded in rule 4.31 (“the Court may ... dismiss”) should be exercised in favour of the case proceeding to trial. In particular, he presents an expert report, which I discuss below.

The strength of the claim, on the merits, is said to be a factor that the Court should take into account in exercising its discretion in determining whether a claim should be dismissed under rule 4.31. [ 32 ] In my view, there are two compelling reasons not to dismiss. [ 33 ] First, Blue Cross was aware of, or should have been aware of, long ago many of the elements of prejudice that it has now put

forth, but nonetheless it allowed the case to proceed with no complaint about delay, even to the point of counsel suggesting in 2016 that the matter be scheduled for trial. [ 34 ] There is an exception in rule 4.33(2)(

b) that allows a case to continue even though there have been three years of inactivity, which is that “the applicant has participated in [continued proceedings after delay] for a purpose and to the extent that, in the opinion of the Court, warrants the action continuing.” That provision does not directly apply to an application under rule 4.31, but in my view the concept expressed by it (which is waiver) does apply for the purposes of the exercise of discretion.

I do not say that a slow accumulation of delay cannot ever be found to be sufficient delay for a dismissal under rule 4.31, but rather that in the circumstances of this case the continued movement of the case forward when the defendant was aware, or should have been aware, of the alleged prejudice, is a factor to be taken into account. [ 35 ] The witnesses who died passed away years ago. The witnesses who it says are critical and with whom it has lost contact left Blue Cross’ radar screen years ago. [ 36 ] Second, there is the extensive medical opinion dated March 31, 2017, provided by Dr. Richard Zabrodski.

It must be taken into account in the exercise of discretion. Dr. Zabrodski is a well-known occupational medicine physician who practises in Calgary. He has frequently been accepted as an expert witness at trial in the Court of Queen’s Bench of Alberta. He expressed twice in his report his understanding that it is his duty to assist the court and not be an advocate for any party. Although he was retained by the plaintiff, he clearly considers himself to be independent. [ 37 ] He comments (page 20) on what he sees as “the clear bias and protestations of the medical reviewers hired by Blue Cross”.

He further comments (page 22) that, The records also suggest that the Blue Cross medical advisors completely ignored the concept of pain as understood in the 21 st century and relied entirely on the 19 th century medical model of tissue healing. [ 38 ] Dr. Zabrodski clearly felt that there were enough medical records for him to form a clear understanding of the case, when combined with his actual examination of Mr.

Goldring. [ 39 ] His apparently strong view that there is merit to the claim and that Blue Cross has consistently used inappropriate analyses in refusing benefits, in circumstances where no IME done by Blue Cross, is a compelling reason to direct the case to trial.

Conclusion [ 40 ] In all of these circumstances, although there has been delay and there has been some prejudice to Blue Cross, in my view that prejudice has been exaggerated (as demonstrated in part by the last-minute attempt to bolster its case with allegations of prejudice that had not even been considered at the time of bringing the application), and in any event I cannot in good faith strike this claim. [ 41 ] The application to strike is therefore dismissed. [ 42 ] If the parties cannot agree on costs, they may approach the Court.

If a scheduling order is thought to be appropriate under rule 4.33(2), the parties may contact the Masters’ Chambers clerk for an appointment. Heard on the 20 th day of September, 2017. Dated at the City of Calgary, Alberta this 17 th day of October, 2017. A. R. Robertson, Q.C., M.C.C.Q.B.A. Appearances: Julie Shepherd MLT Aikins LLP for Blue Cross Life Insurance Company of Canada

Ryan Phillips Jensen Shawa Solomon Duguid Hawkes LLP Allan K. Bayda Bayda Disability Law Firm for Daniel Goldring